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Don’t Ever Let Your Car Insurance Lapse in NY State

January 20th, 2011 · No Comments

Car insurance lapses can occur in ways you might not have imagined, and at least in New York State, the consequences can be extremely unpleasant.

First, let us get a clear idea of when the insurance gets lapsed? Of course, you know that it gets lapsed if you don’t pay the premium in time. It is the less obvious scenarios that can cause you real trouble.

The basic issue is that you have to keep your car insured 100% of the time until you have sold or lost possession of the vehicle. A lapse can occur in the following cases:

  • You have registered a car but your insurance on the car has not yet come into force
  • You have canceled your old insurance as you are not using the car, but have not yet surrendered the license plate or canceled the car registration
  • The time period between the cancellation of an old insurance and coming into force of the new insurance
  • The time period between cancellation of insurance and providing proof that your car no longer needs insurance because it has been sold, for example

What happens if a lapse occurs as above?

You will receive a letter from the NY Department of Motor Vehicles asking for proof of insurance or for not needing insurance. Don’t ignore the letter and hope business will go on as usual. It won’t.

You have 90 days to reinstate the insurance. However, your registration will be suspended for the lapsed days when you had no insurance. The suspension starts from the day you reinstate insurance.

A lapse of more than 90 days means that your driver’s license will also be suspended in a similar manner along with the registration. Additionally, you will also have to pay a penalty of $50.

Don’t you think it is better to comply with the DMV requirements rather than go through with all the hassles and unpleasantness? Even if it means skipping a few drinks to save enough to pay the monthly insurance?

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